What Is Capital Intensive?

Capital-intensive industries refer to industries and sectors that require more capital investment. Also known as capital-intensive industries. Such as metallurgical industry, petroleum industry, machinery manufacturing and other heavy industries. More technical equipment, large investment, less labor capacity, slower capital turnover, and slower investment results.

Capital intensive

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Capital-intensive industries refer to industries and sectors that require more capital investment. Also known as capital-intensive industries. Such as metallurgical industry, petroleum industry, machinery manufacturing and other heavy industries. More technical equipment, large investment, less labor capacity, slower capital turnover, and slower investment results.

Compared with technology-intensive industries, the output of capital-intensive industries is directly proportional to the amount of investment, and the labor force required by the industry is inversely proportional. Therefore, products with a large proportion of materialized labor consumption and a small proportion of living labor consumption are generally called capital-intensive products. Developing capital-intensive industries requires a lot of technical equipment and funds.

China has a large population, a shortage of funds, and backward technology. It is difficult to develop capital-intensive industries on a large scale, but it is necessary to realize modernization. Therefore, we should proceed from reality, give full play to the enthusiasm of localities, departments and enterprises, and develop capital-intensive industries in a focused and step-by-step manner.

Chinese name

Capital intensive

Foreign name

Capital intensive

the difference

Below is a comparison of several industries.

1 Capital-intensive industries.

It refers to the industry in which the cost of capital is larger than the cost of labor in unit product costs, and each worker has a higher amount of fixed capital and working capital. At present, capital-intensive industries mainly refer to the steel industry, general electronics and communications equipment manufacturing, transportation equipment manufacturing, petrochemicals, heavy machinery industry, and power industry. Capital-intensive industries are mainly distributed in basic industries and heavy processing industries, and are generally regarded as an important basis for the development of the national economy and industrialization.

2 Labor-intensive industries

Refers to industries that rely heavily on labor for their production and have a low dependence on technology and equipment. The measure is that the proportion of wages in production costs compared with equipment depreciation and research and development expenditures is relatively large. Generally speaking, the current labor-intensive industries mainly refer to agriculture, forestry and textiles, clothing, toys, leather, furniture and other manufacturing industries. With the advancement of technology and the application of new process equipment, the technology and capital intensity of labor-intensive industries in developed countries have also increased, and they have gradually differentiated from labor-intensive industries. For example, the food industry is classified as a capital-intensive industry in developed countries.

3. Technology-intensive industries

In the production process, industries that rely on technology and intellectual factors far more than they depend on other factors of production. The current technology-intensive industries include: microelectronics and information product manufacturing, aerospace industry, atomic energy industry, modern pharmaceutical industry, new materials industry, etc.

4. Resource-intensive industries

Resource-intensive industries, also known as "land-intensive industries". An industry that requires more natural resources, such as land, to produce inputs. As a production factor, land resources generally refer to various natural resources, including land, virgin forests, rivers, lakes and seas, and various mineral resources. The most closely related to land resources are agriculture and mining, including plantation, forestry, animal husbandry and fishery, and extractive industries. Under the traditional industrialization model, although the productivity has been greatly developed and huge wealth has been created, it has also paid a heavy price for the unreasonable development and use of resources and the environment. China's new-type industrialization road cannot follow the path of pollution first and then governance, but must follow the path of low resource consumption, less environmental pollution, and sustainable development. Therefore, we must pay attention to the coordination of economic development and resources and environment.